Open Tax Lot Tracking Across Brokerages
Open tax lot tracking is the process of keeping a current view of every unsold taxable lot across brokerage accounts, including purchase date, cost basis, current value, gain or loss, and holding period. It matters because investors do not own one blended tax object when they buy the same stock or ETF several times. They own separate lots, and each lot can create a different tax result when sold.
Most investors only notice tax lots at tax time.
That is too late.
Open lots are the inventory of future tax decisions. They decide whether a sale realizes gain or loss, whether that gain is short-term or long-term, whether a harvested loss is useful this year, and whether a recent purchase creates wash sale risk.
The problem gets harder across brokerages. A Fidelity account may show one set of open lots. A Schwab account may show another. An E*TRADE stock plan account may hold RSU or ESPP lots. A spouse account may have recurring buys. Each account can be accurate by itself and still leave the investor with an incomplete household tax picture.
TaxHarvest is built for that gap. It works on existing brokerage portfolios with read-only connections. Assets stay where they are. The software adds the tax layer: open lot tracking, lot-level loss detection, optimal lot selection, wash sale and rebuy notifications, and matched-pair gain realization across accounts.
What Is Open Tax Lot Tracking?
Open tax lot tracking means tracking the tax lots that have not yet been sold.
A lot is created when an investor buys shares. If the investor buys 100 shares of an ETF in January, 50 shares in April, and 75 shares in September, those purchases may all sit under one position in the brokerage app. For tax purposes, they are separate lots.
Each lot has its own facts:
| Lot field | Why it matters |
|---|---|
| Purchase date | Determines short-term or long-term holding period |
| Cost basis | Determines gain or loss if that lot is sold |
| Current value | Shows whether the lot has a harvestable loss today |
| Account location | Shows which brokerage holds the shares |
| Replacement history | Helps flag wash sale risk from recent buys |
IRS Topic 409 defines the basic capital gain or loss as the difference between adjusted basis and the amount realized on sale. The same page also explains that a capital gain or loss is generally long-term if the asset was held for more than one year, and short-term if held for one year or less.
That is why the lot view matters. Two lots in the same ETF can have the same market price and very different tax results.
For a deeper explanation of how software should compare these fields, see tax lot optimization tools.
Why Does Open Tax Lot Tracking Across Brokerages Matter?
Open tax lot tracking across brokerages matters because the tax return combines results that brokerage apps often separate.
One account may contain the loss.
Another account may contain the gain.
A third account may contain the purchase that creates wash sale risk.
The IRS does not ask whether a loss and gain happened at the same brokerage. Capital gains and losses are netted on the return. If losses exceed gains, IRS Topic 409 says the excess capital loss deduction against ordinary income is generally limited to $3,000 per year, with unused loss carried forward.
That makes context valuable.
A $12,000 harvested loss may be partly deferred if the investor has no capital gains this year. The same $12,000 loss may be immediately useful if another brokerage account has $12,000 of realized gains.
Wash sales also cross the account boundary in ways investors miss. IRS Publication 550 says a wash sale can occur when an investor sells stock or securities at a loss and buys substantially identical stock or securities within 30 days before or after the sale. It also says a spouse purchase or an IRA purchase can create a wash sale.
That is the reason a brokerage-only view can fail. The brokerage that holds the loss position may not know that a spouse bought the same ETF somewhere else yesterday.
For the multi-account version of this problem, see multi-brokerage tax loss harvesting software and tax loss harvesting multiple taxable accounts.
What Does an Open Lot View Show That a Position View Hides?
A position view shows the blended result. An open lot view shows the tax choices inside the position.
Assume an investor owns 300 shares of the same ETF across three purchases:
| Lot | Shares | Basis per share | Current price | Tax result if sold |
|---|---|---|---|---|
| January lot | 100 | $72 | $90 | $1,800 gain |
| May lot | 100 | $103 | $90 | $1,300 loss |
| October lot | 100 | $86 | $90 | $400 gain |
The position is up overall.
Total basis is $26,100. Current value is $27,000. The position-level screen shows a $900 gain.
But the May lot is down $1,300. If the investor sells shares from the January lot, they realize a gain. If they identify and sell the May lot, they harvest a loss.
This is where specific identification matters. IRS Publication 550 explains that if an investor can adequately identify the shares sold, the basis is the basis of those particular shares. If the investor cannot adequately identify the shares, the basis generally falls back to the securities acquired first, except for certain mutual fund rules.
Open tax lot tracking turns that rule into a practical workflow. It lets the investor see the lots before the trade, not after the tax form arrives.
TaxHarvest uses this lot-level view to find unrealized losses hidden inside winning positions. It then compares the tax value of selling one lot versus another. That is the difference between seeing a position and managing the tax inventory inside it.
For the sale-selection mechanics, see optimal tax lot selection.
How Does the Worked Calculation Look Across Brokerages?
Assume Mia and Daniel are married filing jointly. They have $720,000 of taxable income in 2026, so some long-term capital gains can fall in the 20% federal bracket. IRS Revenue Procedure 2025-32 lists the 2026 20% long-term capital gain threshold as starting above $613,700 for married joint filers. They are also above the $250,000 married filing jointly threshold for the 3.8% net investment income tax described by IRS Topic 559.
For their long-term gains, the combined federal rate can be 23.8% before state tax.
Their open lots are spread across accounts:
| Brokerage | Open lot | Tax result if sold | TaxHarvest action |
|---|---|---|---|
| Fidelity | NVDA, 40 shares | $11,800 long-term gain | Candidate for matched gain |
| Schwab | LLY, 18 shares | $6,150 long-term gain | Candidate for matched gain |
| E*TRADE | AFRM, 310 shares | $11,200 loss | Candidate to harvest |
| Robinhood | PYPL, 140 shares | $6,750 loss | Candidate to harvest |
The calculation is simple once the open lots are visible:
| Matched gains | $11,800 + $6,150 = $17,950 |
| Matched losses | $11,200 + $6,750 = $17,950 |
| Net capital gain from the pair | $17,950 - $17,950 = $0 |
| Federal tax avoided on the gain | $17,950 x 23.8% = $4,272.10 |
This is not just loss harvesting. It is matched-pair gain realization.
Mia and Daniel can use the losses to realize gains at $0 net capital gain. They reduce embedded gains in NVDA and LLY, raise basis in the portfolio, and avoid wasting the losses as a carryforward when they can be used now.
Without open tax lot tracking across brokerages, the household might see four separate account screens and miss the pair. With TaxHarvest, the recommendation can be built from the combined lot inventory.
For the strategy behind that result, read matched pairs tax loss harvesting and raising cost basis to zero tax.
Where Do Wash Sale Notifications Fit?
Wash sale notifications sit on top of open tax lot tracking.
A lot can look like a perfect harvest and still be wrong if the investor, spouse, IRA, dividend reinvestment plan, or recurring buy creates a replacement purchase inside the wash sale window. This is why an open lot tracker should not only store the past. It should also warn about near-term buys.
Suppose TaxHarvest finds the AFRM lot with an $11,200 loss. Before recommending a sale, it checks recent and scheduled purchases. If Daniel has a recurring buy set for the same security next week in another account, the software should flag the conflict before the sale happens. The better action may be to pause the buy, sell a different lot, use a non-identical replacement, or wait until the window clears.
This is also why open lot tracking has to include account location. The tax risk is not limited to the account that holds the lot.
For the alert workflow, see wash sale rebuy notifications.
What Should Investors Look For In Open Tax Lot Tracking Software?
Open tax lot tracking software should do more than collect rows of data.
The useful version answers five questions before a taxable sale:
- Which open lots are sitting at a loss today?
- Which losses are hidden inside positions that look profitable overall?
- Which lots should be sold first, given gains, holding period, and tax rate?
- Which recent or planned purchases could create a wash sale?
- Which losses can be paired with gains to raise basis at $0 net capital gain?
The answer should be specific. "You have a loss" is not enough. The investor needs to know which lot, which account, which tax character, which dollar result, and what to avoid buying next.
TaxHarvest works as an overlay on the investor's existing brokerage accounts. The investor does not need to move assets into a managed portfolio. The software reads open lots, compares alternatives, and surfaces tax-aware sell and rebuy guidance.
That model matters for investors who already like their holdings. Open tax lot tracking is not a reason to surrender the portfolio. It is a way to manage the tax choices inside the portfolio the investor already owns.
For the broader product category, see tax loss harvesting software, tax loss harvesting software for your existing portfolio, and automated tax loss harvesting without moving accounts. For a narrower mechanics view, start with FIFO vs specific identification of tax lots.